Lummis Bitcoin Reserve Act: Creating State Storage Facilities, Funding from Fed Gold Revaluation

The Block reported that "2024 Bitcoin Reserve Act," proposed by crypto-friendly Senator Cynthia Lummis, aims to strengthen the position of the US dollar in the global financial system, repay US debt, and establish a decentralized network for secure Bitcoin storage. The bill also provides a legal pathway for the US and individual states to purchase Bitcoin.

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States Can Jointly Include Bitcoin in Financial Reserves

A report indicates that details of the "2024 National Optimization Investment Promotion Innovation, Technology, and Competitiveness Act, also known as the 2024 Bitcoin Reserve Act," proposed by Lummis at a recent Bitcoin conference, were further updated yesterday.

In addition to the "1 million Bitcoin purchase plan within 5 years" revealed at the conference, she also added that the asset will be held for at least 20 years, and within the subsequent 2 years, no more than 10% of the Bitcoin may be sold, and it can only be used to repay federal debts.

Lummis also stated that the U.S. Department of the Treasury (DOT) will be responsible for establishing multiple decentralized Bitcoin storage facilities and security networks distributed across various states in the U.S.:

We will select the locations of each facility based on a comprehensive risk assessment, geographic diversity, security, and accessibility.

As she mentioned, this provides a legal framework for the U.S. and other states to purchase and hold Bitcoin:

States can also voluntarily include Bitcoin in their financial reserves, but must comply with certain requirements including security protocols.

It is reported that states such as Jersey City in New Jersey, Wisconsin, and Houston in Texas have expressed optimism in investing in Bitcoin by injecting retirement funds into Bitcoin spot ETFs.

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Now, the eventual implementation of this act will benefit various states in the U.S., reducing the paperwork and costs required for them to invest in Bitcoin.

Bitcoin Reserve Expected to Be Funded by Fed's "Gold Revaluation"

However, Lummis indicated that the chances of the bill passing and becoming law this year are slim, but it may be considered after the November elections:

Establishing a strategic Bitcoin reserve to support the dollar with digital hard assets will ensure our country's global financial leadership position in the coming decades.

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Regarding the funding source, she also pointed out that the Treasury Department must issue quarterly public reports to confirm the specific amounts of seized assets and excess reserves:

After the act is passed, the Fed must deliver a report on the revaluation of gold reserves to the Treasury Department within 6 months and report on the differences and changes in market value each month.

It is noted that from 2025 to 2029, $6 billion will be allocated from any net proceeds reported by the Fed, and the institution's available funds will be reduced from the current $6.825 billion to $2.4 billion for the purchase of Bitcoin reserves.

Previously, Trump has also expressed support for utilizing the existing amount of Bitcoin held by the U.S. government to form a new "National Bitcoin Strategic Reserve."

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